Could the UK's gas grid be converted to hydrogen?

[NOTE: An earlier version of this piece appeared on 13 July on The Fifth Estate. This version has been updated.]

A new study claims converting the UK gas grid to carry hydrogen instead of natural gas will help to meet the UK’s carbon reduction targets and is technically feasible without much disruption to consumers. It proposes Leeds as a pilot city, but there are still major problems to be overcome before it can go ahead.

The proposal is called the H21 Leeds City Gate and the report has been produced by the North of England’s gas distributor, Northern Gas Networks, which is clearly worried by what could happen to its assets down the line, as the country reduces its greenhouse gas emissions by 80 per cent of 1990 values by 2050, which is the target.

It commissioned Kiwa Gastec, Amec Foster Wheeler, and Wales & West Utilities to assess the prospects for converting the gas network to take hydrogen instead of natural gas for cooking in heating, beginning in Leeds and eventually covering the entire UK.

The study is backed by no less than four other recent reports, all making the case for using the existing gas grid, which serves almost half the UK population, for either biogas or hydrogen or a combination.

• National Grid's Future of Gas report
• Energy Networks Association (ENA)'s Green Gas report
• The Green Gas Book backed by the UK's Labour Party
• Consultants KPMG's report 2050 Energy Scenarios - The UK Gas Networks role in a 2050 whole energy system.

A UK-wide conversion of the grid to hydrogen gas could, it’s claimed by H21, reduce greenhouse gas emissions associated with domestic heating and cooking – currently over 30 per cent of the UK’s total emissions – by a minimum of 73 per cent, as well as supporting decarbonisation of transport and local electricity generation.

The report argues that a hydrogen gas grid could use the existing underground natural gas pipe network, and that household appliances can be converted to run on hydrogen with far less disruption and expense than converting to renewable energy sources.

Dan Sadler, H21 project manager at Northern Gas Networks, said: “Households won’t be required to buy new appliances. The conversion process will be similar to that carried out in the 1960s and ’70s when 40 million appliances across 14 million households were converted from town gas to natural gas. We’d have special teams, working street by street to make the conversion as smooth as possible for customers with minimal impact in the homes and the highways.”

H21 says the project would be funded the same way as happened during that first conversion. This would allow the costs to be paid back over time and, alongside energy efficiency measures, would have a minimal impact on household energy bills.

Household appliances will, however, need to be upgraded or modified.

Pure hydrogen embrittles many pipeline steels causing cracking and many pipes are made of iron, but they are slowly being changed to polypropylene at a cost of around £1 billion (AU$1.75b) a year. This cost is spread across consumer bills.

NGN is proposing that Leeds, the UK’s third largest city, is used as a prototype test bed, and the conversion would take place from 2026-29. If successful, there would be a rollout across the UK, implemented at the pace required.

The government has cautiously welcomed the report as a contribution to the debate on Britain’s energy future.

John Loughhead, the chief scientific adviser at the Department for Energy and Climate Change, said: “Meeting the challenge of the Climate Change Act is a huge technical and business challenge. The H21 Leeds City Gate project has usefully explored one possible contribution to meeting this challenge. DECC, and wider UK government, are looking forward to seeing the full findings of the project in the final report.”

The Leeds proposal has received backing from local authorities and businesses including Leeds City Council, the Leeds City Region LEP and Tees Valley Unlimited LEP.

Councillor Lucinda Yeadon, Leeds City Council’s executive member for environment and sustainability, said: “Transforming Leeds into a hydrogen city would be a bold step. It could play a crucial role in how we heat and power our homes in the future alongside other sustainable energy sources.”

NGN is asking for £70-100 million to take the project to the next stage.

Big hurdles

There are several problems with NGN’s proposal besides replacing the pipes, to do with the energy content of hydrogen, and the process of obtaining it.

NGN is proposing the hydrogen be derived from North Sea natural gas with the carbon dioxide removed and placed securely back under the sea so that it doesn’t contribute to global warming.

But at present there is no proof this can work or will be cost-effective. 

Let’s look at this a little more closely.

Most hydrogen in the lithosphere is bonded to oxygen in water. Over 90 per cent of today’s hydrogen is mainly produced by a process called steam reforming, which uses fossil fuels – natural gas, oil or coal – as a source of the hydrogen. The carbon dioxide is removed and vented to the atmosphere.

Hydrogen produced from gas this way is two to three times the cost of the original fuel.

Of course, the energy content of hydrogen is less than that of the original fuel. The claimed energy efficiency for natural gas reforming is 75 per cent. Furthermore, by weight, a unit of hydrogen contains around three times more energy than natural gas or petrol:

• Hydrogen: 33.33 kWh/kg
• Natural gas: (82-93 per cent methane): 10.6-13.1 kWh/kg
• Petrol: 12.0 kWh/kg
• Methane: 13.9 kWh/kg

But natural gas is 7.857 times more dense than hydrogen, and we buy it by volume. Since natural gas carries 41.7 per cent less energy per unit of weight, you’d need to pipe to people’s homes just over three times as much volume of uncompressed hydrogen for them to get the same amount of energy, so the pipes will be under greater pressure to compensate.

Then there’s the climate change problem. The global warming potential of producing hydrogen using the steam reforming process is 13.7kg CO2-e per kg of hydrogen produced. Coal gasification, another major production method, delivers even worse emission levels.

A typical steam methane reforming hydrogen plant with a production rate of one million cubic metres of hydrogen a day produces 0.3-0.4 million standard cubic meters of CO2 a day, which is normally vented into the atmosphere.

To fully attain the benefits of using hydrogen, we must therefore either produce it from renewable energy – or capture and store somewhere the carbon dioxide removed during steam reforming – a process called carbon capture and storage. H21 is proposing the latter.

The renewables option

There are at least eight sustainable ways of producing hydrogen. Electrolysis of water is the cheapest but currently is much more expensive, around US$1500/kWh.

A comparison of photoelectrochemical (PEC) and photovoltaic-electrolytic (PV-E) ways of producing hydrogen with low CO2 and CO2-neutral energy sources indicated that base-case PEC hydrogen is not currently cost-competitive with electrolysis using electricity supplied by nuclear power or from fossil-fuels in conjunction with carbon capture and storage.

They are currently an order of magnitude greater in cost than electricity prices with no clear economic advantage to hydrogen storage as of yet.

A number of possibly cheaper technical breakthroughs are in the wings but we don’t yet know if and when they will be commercially viable.

Analysts at the US National Renewable Energy Laboratory who have looked into the feasibility of hydrogen, assume that 53kWh are required for an electrolyser to produce a kilogram of hydrogen (remember that’s 33kWh when converted), so we’d need a lot of renewable energy to create all the hydrogen to feed the grid.

It might just be more effective to send the electricity straight there and use it directly for heating and cooking.

The CCS option

The H21 proposal has been welcomed by Scottish Carbon Capture & Storage, a research partnership that includes the British Geological Survey, whose director, Stuart Haszeldine, called steam reforming with carbon capture and storage “the least cost method of generating the large amounts of hydrogen required”.

So he is right. Except that no one knows how much it will cost.

The H21 report points towards the very few existing CCS projects in the US and elsewhere – but these operate under very different conditions.

Ever since CCS was first proposed over 15 years ago, I have been sceptical that it could work. It has always been seen as a get-out-of-jail card to permit business as usual in terms of fossil fuels and energy use while seeming to tackle climate change.

Every single deadline and target to get economically viable demonstration and proof-of-concept projects off the ground has been missed in Europe.

This crucial hurdle needs to be overcome – perhaps by backing a completely different and sustainable route to making the hydrogen, or by using the carbon dioxide removed as a feedstock for fuels, chemistry and polymers.

This is called Carbon Storage and Utilisation (CCU).

CCU for the production of fuels, chemicals and materials has emerged as a possible complementary alternative to CO2 storage, but the report does not mention it. Nor do the two other reports on adapting the gas network produced last week.

"CCS is basically a non-profit technology, where every step is costly. CCU however has the potential to produce value-added products that have a market and can generate a profit." says Dr Lothar Mennicken, German Federal Ministry of Education and Research.

The report CCU in the Green Economy from The Centre for Low Carbon Futures shows CCU can be profitable with short payback times on investment.

It says: "Although only a partial solution to the CO₂ problem, under some conditions using CO₂ for CCU rather than storing it underground can add value as well as offsetting some of the CCS costs."

But what are the life-cycle carbon emissions of hydrogen production using SMR plus CCS/CCU?

The latest UK government estimated LCA CO2 emission figures for NG combustion are 184.45 g/kWh plus 24.83 g/kWh emitted by the supply system, totalling 209.28 g/kWh.

But this depends on the gas source: e.g., liquefying natural gas in Qatar, transporting it in refrigerated ships, transporting it in special depots, reclassifying and compressing it into the transmission system can add around another 20 g/kWh, totalling 230 g/kWh.

The carbon footprint of SMR+CCS has been evaluated as 269 g/kWh using the lowest 184.45g/kWh figure above and assuming an efficiency for the process of 68.4%. But applying this to the more accurate lifecycle figure for NG of 230 g/kWh obtains 336.26 g/kWh.

If 90% of the carbon dioxide emitted by combustion is captured by CCS or CCU this still leaves [184.45/0.687] x 0.1 + 20 + 24.83 g/kWh = 71.68g/kWh emissions of carbon dioxide equivalent gases – a not insignificant amount.

H21Leeds puts the figure higher, at 85.83g/kWh. Hardly zero carbon – so H2 generation by renewable energy + electrolysis might be a necessary option in the future.

So, for the time being H21 is an interesting dream – but we must wait to see if it can become a reality.

David Thorpe is the author of:

• Best Practices and Case Studies for Industrial Energy Efficiency Improvement (with Oung, K. and Fawkes, S. UNEP, 2016)
• A London Conversation: Business Briefing on Green Bonds (The Fifth Estate, 2015)
• The One Planet Life (Introduction: Jane Davidson. Routledge, 2015)
• Earthscan Expert Guide to Energy Management in Buildings (Earthscan, 2013)
• Earthscan Expert Guide to Energy Management in Industry (Earthscan, 2013)
• Earthscan Expert Guide to Solar Technology (Earthscan, 2011)
• Earthscan Expert Guide to Sustainable Home Refurbishment (Earthscan, 2010)

Severn Trent goes self-sufficient in renewable gas

An example of Malmberg’s double container COMPACT plant, which is used in the upgrading of biogas to biomethane through the ‘water washing process’.

Work will soon start on the largest fully commercial gas-to-grid plant to be built in the UK to date, which will purify sewage gas on behalf of Severn Trent Water.

When completed, it will process up to 1500m3 per hour of renewable biogas to a state at which it can be safely injected into the national gas grid and make the water company self-sufficient in gas.

Imtech Waste, Water and Energy (Imtech) has been awarded the contract, worth an estimated £6.4 million, by Severn Trent Water to construct the Minworth Gas-to-Grid plant. The project will run for 60 weeks.

This project has only been made financially viable following the recent introduction of the Government’s Renewable Heat Incentive scheme.

Its award has resulted in job creation at Imtech, with a number of new team members employed specifically for this high profile project, including project management, QS and engineering positions, as well as several general site staff jobs.

Commented Nick Small, operations manager at Imtech: “We are extremely pleased to have been awarded such a high profile contract, which represents a significant step change for the waste industry in the UK.

"Severn Trent is already the UK’s largest producer of electricity from sewage gas producing 192GWh in 2012/13, and with the help of Imtech this will enable Severn Trent to become totally self sufficient in gas demand."

The project represents another key milestone in the development of the Waste and Energy business at Imtech, after it recently began work on a prestigious contract to develop the Wakefield AD biogas plant with Shanks Waste Management. This is part of a wider agreed plan to reduce the landfill diversion rate of Wakefield district waste by 90%.

The production of grid-quality biogas from sewage is not without technical problems, but a partial solution to these has been found at Cranfield University, which, earlier this month, received an award for its research in this area.

The research was recognised by the Worshipful Company of Engineers for excellence in engineering that benefits the environment.

It was awarded for looking at the most effective methods for removing chemicals called siloxanes from the process. Siloxanes end up in sewage because they are widely used to soften, smooth, and moisten, in products such as shampoos and moisturisers.

But they do not decompose in the sewage system, and so find their way into the waste matter that remains following the sewage treatment process. They then turn into silicon dioxide, or sand, during the process of burning this waste for biogas and ‘green energy’, which can block engines and cause costly damage.

PhD student Caroline Hepburn, whose research is funded by Severn Trent Water, was presented with the Hawley Award and a cheque for £5,000 at the Worshipful Company of Engineers’ Annual Awards Dinner, on 9 July by Sir George Cox, Board Member of NYSE-Euronext and Director of Shorts, the aerospace company.

Pic from Imtech

An example of Malmberg’s double container COMPACT plant, which is used in the upgrading of biogas to biomethane through the ‘water washing process’.

Renewable Heat Incentive launch set for next Spring

Solar thermal is one of the most affordable renewable technologies and the Solar Trade Association is looking forward to boom time.

Details of the domestic Renewable Heat Incentive (RHI) and related tariff levels have been announced by the Department of Energy and Climate Change (DECC), but anticipated news about the future of the non-domestic RHI has been postponed.

The domestic RHI will launch next Spring. As has always been promised, anyone who has installed a system since 15 July 2009 can claim retrospectively, as long as they meet the Microgeneration Certification Scheme (MCS) standards that applied at the time of installation.

DECC has confirmed the tariff levels for all four eligible technologies. These will be:

• Flat plate and evacuated tube solar thermal panels: at least 19.2p/kWh


• Ground (and water) source heat pumps: 18.8p/kWh


• Air to water heat pumps : 7.3p/kWh


• Biomass-only boilers and biomass pellet stoves with back boilers: 12.2p/kWh.

Payments will be made on a quarterly basis over a period of seven years. Householders who have already received vouchers under the Renewable Heat Premium Payment scheme will be transferred to the RHI and have their value deducted from their RHI payments.

Applicants will need to complete a Green Deal assessment to reduce their energy demand to a certain level in order to qualify for the payments.

Private landlords and providers of social housing will be able to apply for a property or properties that they own (provided they own the heating system). The landlord will receive the RHI payments.

For Local Authorities who use Arm’s Length Managed Organisations (ALMOs) to manage their properties, the application must come from the owner of the heating system.

New build properties will not be eligible for the scheme. The Renewable Energy Association said this "reinforces the need for the government to set demanding carbon compliance standards in the 2013 revision of the Building Regulations Part L, due for imminent release by DCLG".

People will not be able to claim for more than one space heating renewable heating system in the same property, with the exception of installations of solar thermal and another eligible technology.

Climate change minister, Greg Barker, said: “Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the coalition is 110% committed to boosting and sustaining growth in this sector.”

DECC gives an example of what an installer might receive, in the case of a biomass boiler which might cost, say, £8,000 to install. In a year, the estimated heat use could be around 15,000kWh, which, at a 12.2p/kWh tariff, would result in a payment of £1,830. This would mean it might pay for itself in around five years.

New installations of biomass systems will need to meet air quality standards in relation to particulate matter (PM) and oxides of nitrogen (NOx).

Ofgem will be responsible for administering the scheme when it launches.

The RHI is funded directly from Government spending and has been given annual budgets. There are worries that, as with the payments for Feed-in Tarriff PV systems, they might unexpectedly decrease in the future. DECC will make an announcement on this around the time of the launch.

The news was welcomed by trade body the Heating & Hotwater Industry Council, whose director, Roger Webb, said: “it gives the industry confidence to invest in renewable heating products helping to protect and create jobs. We would of course like the tariffs to be higher but we understand the difficulty of introducing a government funded scheme in the current economic climate," he added.

"We will also be urging DECC to monitor uptake and if necessary to increase tariffs if they are not driving up product sales.”

Stuart Elmes, Chair of the Solar Trade Association's solar thermal working group, called the announcement “a massive boost for the solar thermal market. The value of this incentive is on a whole new level, there’s nothing like it anywhere in the world. From now on people can install solar heating with confidence that their system will be able to join the RHI scheme, and knowing what their payments will be worth.”

Solar thermal is one of the most affordable renewable technologies for homeowners, with a typical system costing around £4,500. This includes the replacement of an old hot water cylinder with a well-insulated solar cylinder.

Solar thermal systems are relatively small and appropriate for partially shaded roofs or those with limited space. A typical system will provide over half the hot water needs of the average home.

Paul Barwell, Chief Executive of the STA, said: “This announcement today is a major success for the STA. Our team has worked very closely with DECC over an extended period in an effort to ensure that the benefits of solar thermal are adequately recognised in the domestic RHI.

"In particular we have helped to drive a deeming calculation based on true occupancy that better reflects hot water usage in the home. The exceptional technical expertise of Stuart Elmes has been invaluable to our efforts.”

Ground source heat pump manufacturer Kensa's Managing Director, and Chairman of the Ground Source Heat Pump Association, Simon Lomax, said that the "Domestic RHI announcement made today, three and a half years after the initial consultation, is disappointingly short on detail."

Tim Minett, chief executive of CPL Industries, a supplier of biomass systems and wood pellet distributor, said he was “surprised the Government is offering more for other technologies but still expect biomass systems will be the most popular by far.

"They are the easiest to retrofit to properties, simple to use and work in all weather conditions – a big factor in the UK – while 12.2p/kWh will cover the cost of installation, lower people’s fuel bills and provide regular income for years to come. What’s not to like about that? “The domestic RHI should be hugely popular as a fifth of the UK’s housing stock is not connected to the gas grid," but he added, "the chief stumbling block is lack of awareness among the public so what we desperately need now is for the Government to step up and promote the scheme vigorously.”

Brian Smithers, European Director, Rexel, agreed, adding: "it is also in the industry’s interest to drive awareness by educating consumers".

Non-domestic RHI decision postponement

At the same time as making the announcement about the domestic RHI, the Government said it was delaying a decision on expanding the non-domestic RHI scheme, which has been operating for over two years, until the autumn, a full year after the proposals were originally released in September 2012.

Industry response was to express disappointment. The Combined Heat and Power Association said the continuing lack of clarity and certainty is "unhelpful for the hundreds of millions of pounds of renewable heat projects currently under development".

Last year the CHP industry welcomed the proposals to expand the RHI scheme to include tailored support for heat produced from biomass and bioliquid CHP. The proposals highlighted recognition within Government that biomass CHP is the most optimal use for limited biomass resources.

Dr Tim Rotheray, Head of Policy and Communications at the CHPA said: "It is absolutely crucial that the Government now provide clarity and certainty. The Government’s proposals for a CHP-specific rate under the RHI is driving renewable heat projects around the country, and a clear, quick decision will help lock in these investments, lock in the jobs these investments will provide, and lock in our ability to meet our renewable heat targets with highly efficient renewable CHP.”

He did, however, welcome the boost to investor confidence given by the Government's decision, also just announced, to grandfather existing renewable CHP schemes from changes to its quality assurance programme.

The biofuel-industry trade body, the Renewable Energy Association, called the delay "disappointing", but welcomed the announcement on the domestic RHI.

The same response came from the Anaerobic Digestion and Biogas Association's chief executive, Charlotte Morton, who called it "very disappointing for AD developers and operators. Making good use of heat from AD plants makes sense for operators, and will help the government deliver renewable energy targets," she added.

"The (non-domestic) RHI is currently well below its projected budget and another delay will simply make it harder for our members to deliver the projects government wants to see.

"DECC could help resolve this by giving developers clarity over the eligibility date, which would allow projects to start generating and using renewable heat if they have commissioned their plant within a set period," she concluded.

Government leaves domestic biogas and microbes CCS out of its heat strategy

The Government has launched a consultation on its strategy for decarbonising heat which omits domestic biogas and the method favoured by Richard Branson for carbon capture.

This is the second consultation on the topic of heat in three years; the last one resulted in the Renewable Heat Incentive and the Green Deal. This one attempts to envisage how the market will be transformed as a result, and as part of the goal of supplying 15% of UK energy from renewables by 2020.

Launching the consultation, Energy and Climate Change Secretary Edward Davey spoke of the need to cut emissions from the way we generate heat and said that many towns, cities and communities across the UK are already switching from fossil fuels to low carbon forms of heating like biomass, heat pumps and solar thermal.

“I want to give the opportunity to others to follow the pioneers," he said, “so that in time, our buildings are no longer dependent on burning fossil fuels for heat but using affordable and reliable alternatives to help create a flourishing, competitive low carbon manufacturing industry."

Alongside the consultation DECC published a series of electronic maps which show the heat demand from buildings across England, aimed at developers so they might identify areas in most need of low carbon heating projects and local authorities.

Demand reduction

The document envisages different solutions for different locations and geographies, as households, businesses and local authorities choose the approach that will work best for their circumstances.

It proceeds logically through an examination of measures to reduce the wastage of heat and hence demand, through to an examination of means to supply the remaining demand.

In particular there is emphasis on the potential for expansion in the heat pumps market and the solar thermal market. In 2010, the UK heat pump market alone was worth nearly £50m, and the solar thermal market grew 24% to £25m.

Heat networks

There is also hope expressed that more heat networks will be installed by, for example, integrating them with local authority plans for urban growth and regeneration.

The document notes that such networks can be the most effective way of supplying low carbon heat to buildings, offering the benefit of flexibility, since a number of different heat sources, such as biomass and gas boilers, combined heat and power (CHP) plants and heat from energy-from-waste plants, can supply the same network.

However, they have a high upfront cost due to the need to install the pipework, and to their dependence on municipal vision. Hence, although widespread in Europe, there are a few examples in this country, exceptions being Nottingham, Sheffield, Birmingham, Aberdeen, Southampton and a new project in Newcastle which is to be supplied from geothermal heat.

The Newcastle borehole will eventually reach 1821m and tap into water at a temperature of 80 deg. C, which will be used to heat a new science park.

Nottingham's one of the largest district heating networks in the UK, with a 65km network serving over 4,600 homes and 100 businesses and public sector properties; roughly 3.5% of the city’s entire heat consumption.

Measures for industry

The consultation also examines the decarbonisation of process heat for industry to create a separate strategy. "By focusing on biomass, biogas and electrification, as well as innovative technologies like Carbon Capture and Storage, we have the opportunity to achieve a competitive advantage, winning contracts abroad in a new and thriving global market," it says.

It recognises six major subdivisions of industry which will need their own specialised attention. These are: Coke and refined petroleum, food and drink, pulp and paper, basic metals, non-metallics and chemicals.

It sees particular opportunities for combined heat and power, which is ironic considering that George Osborne removed support from the technology in his budget two weeks ago.

Biogas

Responding to the Heat Strategy, Energy Networks Association (ENA) Chief Executive, David Smith, expressed disappointment that “domestic use of bio-gas has not been considered. As the Strategy points out, currently 81% of the UK uses gas for its heat and hot water.

"To ignore a potential fuel source which can use existing domestic heat infrastructure seems bizarre to say the least.

“With the proposal that gas for domestic heat be phased in only a decade or so the Strategy has also failed to consider the cost implications for the public."

The ENA is undertaking a major study on domestic heat out to 2050 that will be published in early May.

The Strategy does refer to biomethane injection into the gas grid for the industrial sector. It notes that the Renewable Heat Incentive (RHI) currently only gives support for biogas from anaerobic digestion, sewage gas and syngas for heating equipment with a capacity of less than 200kWh.

It says that the Government will consult on removing this limit or setting a higher limit in September.

Hot air

The RHI is currently limited to supporting installations which generate hot water or steam through a boiler or engine, as these can be metered relatively easily.

The Government is also considering the inclusion of equipment which can heat air directly, thereby potentially expanding the type and number of industrial uses of bioenergy which the RHI supports.

Electrification and carbon storage

The strategy also notes the potential for carbon capture and storage at a small, industrial scale. But it does not seem to be aware of the latest technologies such as the use of microbes, as supported by Richard Branson's Virgin Atlantic.

In the short term it expects industry to concentrate on energy efficiency, switching to low temperature processes and sustainable biomass, using CHP and fuel switching.

After 2020 is looking for even greater efficiency of thermal processes using heat recovery or reuse between high and low temperature processes, greater use of biogas and sustainable biomass, and further electrification of lower temperature processes, for example through direct electric steam generation as the grid itself is the carbonised.

In the longer term wider deployment of carbon capture and storage is anticipated to capture the remaining inherent process emissions. Further fuel switching to electricity and biomass for the remaining high-temperature processes is also expected.

Roger Webb, director of the Heating and Hot Water Industry Council (HHIC), thought this could be a problem. "From the strategy it seems there is a big push on electricity rather than fossil fuels - so the main question is how quickly can we move forward to low carbon electricity?"

DECC expects to receive responses by May 24, expand its evidence base and produce a range of policy proposals around the beginning of next year.

Renewable energy now yields irresistible returns on investment for all businesses

Whatever kind of business you are running, you would be crazy not to take a serious look at using renewable energy - not just to satisfy your own power needs but as a sound financial investment. But you need to get the best, expert advice and think strategically.

The return on a sensible investment in renewable technology would average 11-12%, with the potential for returns of over 20%, according to a report from Carbon Trust Advisory released this week.

With much of the rest of the economy in the doldrums, and energy prices set to rise considerably, where else are you going to get a return like this?

The financial landscape is improving due to Government initiatives such as the Feed-in-Tariffs (FiT) for generating renewable electricity and the similar Renewable Heat Incentive (RHI) - which covers technologies such as solar water heating, heat pumps and biomass boilers.

This is due to kick in at the end of this month for businesses (a similar scheme for homes will follow next summer).

The big names are already leading the way. ASDA, IKEA, John Lewis and Marks & Spencer have all set a target of moving to 100% renewable energy. IKEA now obtains 80% of its total energy use from renewables and has invested in a mix of ground source heat pumps, biomass, solar panels and wind power.

In the US. Google has invested heavily in solar plants, with a 1.65 megawatt photovoltaic power array installed in 2007. But it has learnt that you can't just buy a renewable energy plant and then forget about it.

At the beginning, it failed to put in monitoring and maintenance facilities for each array that would clean the panels regularly and tell it when failures had occurred. A couple of years later it took a look and discovered in this survey that at any one time, the plant may be only generating 70%, and sometimes as little as half, of its potential.

Factors such as accidents, power and frequency matching, shading, potential annual degradation of cells by .5% to 9.5% a year can all affect a photovoltaic system's output.

Similar technical complications arise from all energy technologies, and few can simply be plugged in, switched on and forgotten about in the way that we rely upon the grid.

While The Carbon Trust is right to push the fact that "anaerobic digestion (AD), wind power, biomass heating systems and ground source heat pumps are some of the most attractive and practical renewable energy technologies for UK businesses", businesses need expert help, not just in choosing the right technology for their location but in designing an entire energy management approach that finds the most cost-effective interventions they can make for their particular circumstance.

Investing in demand reduction, energy efficiency, or voltage optimisation, for example, might create just as profitable returns and improvements to the bottom line.

The Carbon Trust can also advise whether a company should purchase or directly generate its own renewable energy, whether to do so on or offsite, where to find the expertise and the implications for an organisation’s supply chain.

UK’s largest renewable gas project

The Carbon Trust suggests that AD (selling the biomethane produced to the gas network) and biomass boilers, typically will offer the highest average internal rate of return.

Biomethane from anaerobic digestion is going to be in hot demand - it may comprise at least 15% of the domestic gas supply by 2020, according to a study by British Gas and the National Grid.

This week British Gas and AD plant manufacturer Bio Group led the way in this area with a joint project to build a £5m anaerobic digestion plant in Stockport to take advantage of the RHI. It will produce organic fertiliser and biomethane which, once upgraded to match the quality of natural gas, will be fed into the gas network.

The feedstock will include food waste from local hotels, restaurants and British Gas’ own offices. It will be constructed on an old landfill site in Stockport, Greater Manchester and will open in April 2012 when it will be capable of supplying 1,400 homes each year.

British Gas and Bio Group, with the Renewable Energy Association, helped to launch a scheme earlier this year called the Green Gas Certification Scheme (GGCS), that provides assurance to customers of British Gas' renewable gas tariff of the biomethane's authenticity as a renewable energy source.

Although complex, the renewable energy field is rapidly becoming easier to enter and more and more mainstream. And with energy prices set to grow by up to 37% by 2020, the opportunity to reduce bills is a strong incentive for all businesses to investigate renewable energy options.

Any business wishing to enquire about the Renewable Heat Incentive (RHI) should phone the accreditation enquiries line 0845 200 2122 between 8:30am until 5pm Monday to Thursday, and 8:30am until 4:30pm on Fridays or email RHI.Enquiry@Ofgem.gov.uk.

Oil from algae

OK, so perhaps we have here a biofuel that isn't problematic.

Judge for yourselves.

Algae represent a feedstock for oil and fuel - biodiesel and ethanol production.

Many of the problems present with the traditional oilseeds such as palm & soy, and with ethanol feedstock such as corn and molasses/sugarcane are not present in algae.

Algae can grow fast, practically anywhere in the world, do not contribute to deforestation and do not interfere with the existing food crop value chains.

Add to this the fact that the fossil oil we use today was formed primarily from algae.

All these may be reasons enough to explore algae as a potentially important feedstock for our future oil and energy needs.

Check out the Oilgae link on the right for more info and let me know what you think.